The Political Economy of Budget Deficits

Alberto Alesina and Roberto Perotti ()

No 4637, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper provides a critical survey of the literature on politico-institutional determinants of the government budget. We organize our discussion around two questions: Why did certain OECD countries, but not others, accumulate large public debts? Why did these fiscal imbalances appear in the last twenty years rather than before? We begin by discussing the 'tax smoothing' model and conclude that this approach alone cannot provide complete answers to these questions. We will then proceed to a discussion of political economy models, which we organize in six groups: i) Models based upon opportunistic policy makers and naive voters with 'fiscal illusion'; ii) Models of intergenerational redistributions; iii) Models of debt as a strategic variable, linking the current government with the next one; iv) Models of coalition governments; v) Models of geographically dispersed interests; vi) Models emphasizing the effects of budgetary institutions.

Date: 1994-02
Note: ME PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (156)

Published as With Jose Tavares, published as "The Political Economy of Fiscal Adjustments", Brookings Paper, Vol. 28, no. 1 (1998): 197-248.
Published as Alberto Alesina & Roberto Perotti, 1995. "The Political Economy of Budget Deficits," Staff Papers - International Monetary Fund, vol 42(1).

Downloads: (external link)
http://www.nber.org/papers/w4637.pdf (application/pdf)

Related works:
Journal Article: The Political Economy of Budget Deficits (1995)
Working Paper: The Political Economy of Budget Deficits (1994)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:4637

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w4637

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().